What to Look for in an EDI Partner

For consumer goods companies, the most important three words when dealing with retail partners are Electronic Data Interchange (EDI). The difference between high and low quality EDI services can be the difference between a good and bad supplier score, excellent or poor retailer relationships, landing or missing out on a new business opportunity for your business and much more. With so much at stake, consumer goods companies must ensure they put the proper time and devotion into finding the right EDI services partner.

The benefits of EDI have long been documented. EDI brings a higher level of compliance, faster information processing, decreased costs, improved shipping accuracy and so much more. However, the first thing to understand is that not all EDI services are created equal. EDI is not a commodity product. EDI is a complex practice, especially since many retailers use their own unique processing rules. There are important things to look for when choosing an EDI partner that can put your business on the path for continued success.

Managed and Non-Managed Services

One of the key things to look for when choosing EDI services is if your partner offers both managed and non-managed services. Managed services allows you to offload all your EDI processing and and other responsibilities to your EDI vendor. Managed services include ongoing map creation and management to the specifications of your trading partners, daily transaction monitoring and full technical support. Non-managed services give you all the necessary tools you need to manage EDI, but it is up to your team to handle map creation, map management and daily transaction monitoring.

Consumer goods companies must carefully consider whether or not to use managed or non-managed services. The biggest consideration is the amount of resources available. In a non-managed environment, your business will be spending money and using team resources that could be put towards other business activities. This is especially true when bringing on a new retail partner that requires the creation of unique maps. Adding new documents can be a daunting task, and the repercussions of failed mapping can be far reaching. If managing EDI is not a core competency of your company it may make more sense to outsource the process to a company with expertise in the field.

Using EDI that is integrated with your ERP software helps streamline your operations. Processing customer orders becomes more efficient and less error-prone. Integrated EDI means purchasing information will automatically flow through the supply chain, leading to reduced chargebacks and improved retailer relationships. When using add-on or stand-alone EDI you run the risk of duplicate data in your ERP application since the data must be synchronized across all your applications. It can also lead to complex data integration issues.

Using an add-on or stand-alone EDI system can also increase the number of resources needed to operate the services. With add-on EDI, the software needs to be integrated with your ERP system, which can add additional costs to your project. Also, IT resources will need to continuously monitor and manage the third-party integration to ensure there are no complications. If issues do arise, you must reach out to both your ERP and EDI providers and coordinate support services until your problem is resolved. With stand-alone EDI services, users will need to manually transfer data from the stand-alone system to your core ERP system. Choosing add-on or stand-alone EDI means your team will need to learn a second application with its own unique navigation, interface and backend. These resources could be used on more strategic projects. Fully integrated EDI has none of these complications. You are only dealing with one vendor, no third-party integration needs to be managed, and data is automatically updated.

Consumer Goods EDI Expertise

Consumer goods companies need to ensure their EDI provider is an expert in the consumer goods industry. EDI is used by many different industries, including education, healthcare, automotive and more. It is important that your EDI provider can demonstrate that they have expertise implementing EDI services with many other companies that distribute consumer goods to retailers.

EDI vendors should have experience handling EDI between companies like yours and big box retailers. Ensure any vendor you are considering understands complex mandates such as Vendor Managed Inventory, Order Status Reporting, and Inventory Status Inquiries. Reaching out to vendor references is a good way to get a feel for the expertise level of each provider.

Conclusion

EDI is a critical part of every consumer goods business. There can be large differences between EDI services partners. Taking the time to research vendors to learn if they offer both managed and non-managed services, are fully integrated with an ERP system and are experts on EDI for consumer goods, can provide great benefits to your company in the long-run.